Six Years on Obamacare Has Failed to Deliver

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Posted by Sarah Feldpausch on Wednesday, March 23rd, 2016, 2:32 PM PERMALINK


Six years ago, President Obama signed Obamacare into law. Since then, Obamacare has placed politics above patients and failed time and time again to protect the health and wellbeing of Americans. Here are six of Obamacare’s most alarming failures:  

  1. Obamacare Illegally Diverted Billions to Reinsurance Slush Fund

The Obamacare reinsurance program was one of three programs (together with risk corridors and risk adjustment) created to hide the true costs of coverage on the exchange and prop up insurers by redistributing funds from different groups to Obamacare exchanges. In the case of reinsurance, this took the form of a $44 assessment on each individual with private health insurance.

For 2015 Obamacare reinsurance, the administration will pay out $6 billion raised from a fee on private health insurance and an additional $1.7 billion that under federal law belongs to the Treasury department. The decision by the Obama administration directly violates section 1341 of Obamacare which explicitly states, “…money shall be deposited into the general fund of the Treasury of the United States and may not be used for the [reinsurance] program established under this section.”

As Doug Badger of the Galen Institute explains, Obamacare reinsurance for 2014 was supposed to raise $12 billion, but fell $2 billion short. To deal with this shortfall, the administration simply decided not to pay Treasury what it was owed.

  1. Sky Rocketing Premium Increases Have Left the American People with Higher Healthcare Bill

Obamacare’s individual mandate forces Americans to buy increasingly unaffordable health insurance or pay a tax. With insurance premiums (and also deductibles) increasing at such a rapid rate, many in the middle class are faced with higher and higher bills when visiting their doctor or a hospital.

At a high of nearly 50% rate increase, Minnesota’s market premium tops the chart. Minnesota is followed by Alaska with a 39.6% increase- Oregon and Tennessee trail closely with 37.1% and 36.3%, respectively. Of the 50 states, enrollees in 34 states saw a top increase in premiums of 20% or more. The premium percentage increases from private insurance companies are broken down by state, proving that Obama’s claim that “healthcare inflation has slowed…” is clearly false.

  1. Billions Wasted on Failed State Exchanges

To date, recovery of the billions in wasted state exchange funds has been near non-existent, despite failed exchanges in Oregon, Hawaii, New Mexico, and Nevada costing taxpayers $733 million. In fact, according to a recent report by the Government Accountability Office, these four states have returned ZERO dollars to the federal government, and state exchanges collectively have so far returned just $1 million.

Of all state exchange failures, the most alarming story is undoubtedly Cover Oregon. An uncovered email confirmed the accusations that the $305 million exchange was run by partisan political advisors focused solely on then-Governor John Kitzhaber’s 2014 reelection.

But the waste doesn’t end there, as “working” state exchanges including VermontMinnesota, Maryland, and Massachusetts have each misused as much as hundreds of millions in taxpayer funds.

In a letter addressed to Senator John Cornyn (R-Texas), Obamacare chief Andy Slavitt said the federal government will “recover its fair portion” of funds in the event a failed Obamacare state exchange reaches a settlement with contractors.

Given that the federal government funded the overwhelming majority of state exchange projects with $5.5 billion in taxpayer funds, “fair portion” should be close to 100 percent.

  1. Obamacare Exchanges Failed to Detect Counterfeit Documents

Obamacare exchanges are failing to verify key enrollment information, according to a report by the Government Accountability Office (GAO). This report comes from a long line finding that controls on federal and state Obamacare exchanges are abysmal.

As part of its review, GAO tested application and enrollment controls on the federal exchange of two state exchanges (California and Kentucky). Ten fictitious applicants were created to test whether verification steps including validating an applicant’s Social Security number, verifying citizenship, and verifying household income were completed properly.

In order to test these controls, GAO’s test applications provided fraudulent documentation. As the report notes, all ten applications remained enrolled on Obamacare even though fraudulent or insufficient documentation was provided.

As a result, each applicant received the Obamacare premium tax credit and cost-sharing reduction subsidies, without being properly verified. The ten applicants received a total of $2,300 in tax credits per month.

  1. Obamacare Website Launched Despite Security Official’s Warnings

The federal Healthcare.gov Obamacare website launched in 2013 without authorization to operate and against the judgment of security agency officials.  This left millions of Americans that enrolled on Heathcare.gov vulnerable to possible fraudulent activity – risks that continue to this day for the more than 6.5 million federal enrollees. Although the Obama administration knew about the security risks, the site was launched.

In the months following, the site’s failures prompted the Obama Administration to contract various groups in an attempt to remedy the quality assurance issues of Healthcare.gov. Despite spending a further $2.14 billion in taxpayer dollars, they failed to fix some of the most serious security concerns.

Two years later, and after persistent and detailed warnings were directed to administration officials, Healthcare.gov was hacked by an outside source – proving the continued insecurity of the site.

  1. Obamacare’s Public Health Slush Fund Wasting Billions of Dollars

Currently, two billion dollars is given each year in perpetuity to an Obamacare slush fund known as the Prevention and Public Health fund. The Department of Health and Human Services is then free to spend these funds as they see fit, without any Congressional oversight.

Unsurprisingly, this has led to the slush fund being used by the Administration as a tool to push blatantly partisan, politicized policies.

Most alarmingly, a 2012 Inspector general alert raised concerns that these payments equated to taxpayer funded lobbying, while former Democrat Senator Tom Harkin (D-Iowa) expressed concern that hundreds of millions sent to the fund have been diverted to encourage individuals to sign-up for Obamacare.

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